March 01, 2010

DOJ: Fraudsters Targeted Ticket Vendors in $25 million Scheme

Federal prosecutors in New Jersey are going after four men who are charged with illegally obtaining and then reselling more than a million tickets to concerts, sporting events and live entertainment in a computer hacking scheme that the government says defrauded Ticketmaster and other vendors.

The Justice Department today unsealed indictments charging the men in the U.S. District Court for the District of New Jersey with crimes that include wire fraud and unauthorized access to computer systems.

Prosecutors said three of the defendants, Los Angeles residents Kenneth Lowson and Kristopher Kirsch, and Joel Stevenson of Alameda, Calif., surrendered at an FBI office in Newark today. The fourth man, Faisal Nahdi of Los Angeles, was expected to surrender soon, Justice officials said. It wasn't immediately known whether the defendants had retained lawyers. U.S. District Judge Katharine Hayden is assigned to the case.

The 43-count indictment charges the defendants of using their company, Wiseguy Tickets Inc., to target vendors that included Ticketmaster, Tickets.com, MLB.com and other vendors to acquire tickets to performances that included Bruce Springsteen, Hannah Montana and Billy Joel. Prosecutors said the scheme also involved tickets to the 2006 Rose Bowl and 2007 Major League Baseball playoff games
at Yankee Stadium.

Prosecutors said the defendants used hacking techniques to get around protection measures that ticket vendors use to block the sale of large quantities of tickets. Among other techniques, prosecutors said the men worked with programmers in Bulgaria to create a network of computers that impersonated individual visitors.

The defendants are also accused of using aliases and shell corporations. Authorities said the men created and managed hundreds of fake Internet domains and thousands of e-mail addresses.

Wiseguys typically sold tickets to brokers, who resold tickets to the public at “significantly” higher prices, according to the Justice Department.

“At a time when the Internet has brought convenience and fairness to the ticket marketplace, these defendants gamed the system with a sophisticated fraud operation that generated over $25 million in illicit profits.” U.S. Attorney Paul Fishman said in a statement. “Today’s indictment represents a significant step forward in the fight against those who use fraud to disrupt E-Commerce and evade computer security.”